Randhawa Construction Co. VS Union Of India

The petitioner is contesting the cancellation of their registration number 24AACRF0752L1Z9, as well as challenging the decision of respondent No.3, dated August 22, 2022, which upheld the rejection of the Order-in-Original dated December 9, 2021, by respondent No.4. The rejection was due to the appeal being deemed time-barred.

The petitioner is identified as a registered partnership firm that has been operating since 1968, primarily engaged in various activities related to equipment erection, underground and above-ground piping, structural fabrication, and erection within the petroleum and chemical sectors. Additionally, the firm provides construction services, tangible goods, manpower, and transportation services. With a workforce exceeding 1200 individuals, the petitioner has established itself as a significant player in its field

The petitioner in this case is contesting the cancellation of their registration number 24AACRF0752L1Z9 and the subsequent rejection of their appeal, which was deemed time-barred. The petitioner, a registered partnership firm, has been involved in various activities such as equipment erection, piping, fabrication, and construction projects in the petroleum and chemical fields since 1968. They also provide services and manpower in addition to supplying tangible goods and transportation services. With over 1200 employees across different projects, the petitioner held GST registration.

The respondents include an officer of the Central Excise Act, 1944, who exercises powers under it, and the first Appellate Authority who decided on the petitioner’s appeal.

The petitioner claims that they faced significant challenges due to the COVID-19 pandemic, which severely affected their business. Additionally, they were embroiled in a family dispute resulting from the death of one partner in 2017, which led to substantial payments amounting to Rs. 8 crores to other family members between 2019 and August 2022. This, combined with disruptions to their business plans and funds, resulted in a financial crunch that prevented them from meeting their tax obligations on time.

The sequence of events leading to the cancellation of their GST registration began on November 15, 2021, when they received a show cause notice citing non-filing of returns for six consecutive months. Despite their attempts to arrange funds to pay outstanding GST dues, their registration was suspended on the same day. Subsequent efforts to respond to the notice were hindered by a lack of knowledge and advice, leading to the cancellation of their registration on December 9, 2021.

The petitioner argues that they made efforts to arrange funds to settle their dues but were unable to do so due to the severe financial crisis they were facing. Despite the lack of specification regarding the outstanding amount in the cancellation order, they claim that proceedings were initiated against them for recovery.

The petitioner in this case is challenging the cancellation of their registration No. 24AACRF0752L1Z9 and the subsequent Order-in-Appeal passed by respondent No.3, dated 22.8.2022, which rejected the Order-in-Original dated 9.12.2021 passed by respondent No.4. The petitioner, a registered partnership firm engaged in various activities including equipment erection, piping, fabrication, construction projects, and manpower services in the petroleum and chemical sectors since 1968, alleges that the appeal was rejected on grounds of being time-barred.

Respondent No.2 is described as the officer of respondent No.1, responsible for duties under the Central Excise Act and related rules. Respondent No.3 is identified as the first Appellate Authority that rendered the decision on the petitioner’s appeal.

The petitioner claims adverse impacts due to Covid-19, including financial strain exacerbated by family disputes resulting in significant payments to other family members. These payments, totaling Rs. 8 crores, were made between 2019 and August 2022. The disruption caused by these events allegedly hampered the petitioner’s ability to meet tax obligations promptly.

Another factor cited for financial strain is the disturbance of business plans and funds, which further hindered timely tax payments.

The petitioner received a show cause notice on 15.11.2021, indicating possible cancellation of GST registration due to failure to file returns for six consecutive months. Despite responding with a letter on 22.11.2021, explaining attempts to arrange funds to clear outstanding dues, the registration was suspended on 15.11.2021. The petitioner contends that due to lack of proper knowledge and advice, they couldn’t submit a reply to respondent No.4 by the scheduled date of 23.11.2021.

Subsequently, on 9.12.2021, respondent No.4 issued the cancellation of GST registration, citing non-filing of returns since February 2021. The order did not specify any payable amount. The petitioner asserts attempts to arrange funds to clear dues but faced severe financial crisis leading to initiation of DRC-13 proceedings by the respondents. Despite paying Rs. 5,24,47,777/- through DRC-03 over time, exceeding the payable amount, the petitioner’s registration remained cancelled.

The petitioner argues that they fulfilled their tax obligations and challenges the cancellation based on the lack of a clear order and opportunity for a hearing. They seek relief from the court, requesting the quashing of the Order-in-Appeal and revocation of the GST registration cancellation. They also request interim relief to restore the registration pending final disposition of the case.

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